How does fannie mae generally structure mortgage-backed, Ask an Expert

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How does Fannie Mae generally structure mortgage-backed bonds, and how does pass-through return of principal factor into the security’s structure? Also, how does the change in yields spur more of less MBS prepayment risk within different CMO tranches? How is prepayment risk quantitatively measured to gauge the probability of a CMO experiencing more/less return of principal? Lastly, what is the influence of such risk on your bond’s YTM and price?

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